models of industrial location by losch

Savitribai Phule Pune University – 411007.DEPARETMENT OF GEOGRAPHY.

“MODELS OF INDUSTRIAL LOCATIONS – LOSCH”.

* Shalaka Kshatriya * Om Solunke *

* Shwetali Deshmukh *

Presented By

Content Introduction.

Industrial Regionalization.

Influencing Factors.

Introduction of Losch.

Losch Theory and It’s Model.

Criticism. Model of Industrial Location :

Losch.

Introduction• Why Industries are located in some particular

region within a state or a country? or whether they are.

• why world’s distribution of industries are very uneven?

• Why No one is trying to start new industry/ company in different part?

Model of Industrial Location : Losch.

World‘s Major Industrial Regions.


Industrial Regions of USA.


India’s Major Industrial Regions.

Influencing Factors. Climatic and physical factors.

Energy resources.

Raw material.

Accessibility. (Transportation)

Market.


Weber’s Theory(1909)

least cost theory.

Minimum cost of

Transport, labor,

agglomeration.

Hotelling Theory (1932)

• dependent on production cost of various locations

Losch’s Theory (1939) Depend on Maximum

sales revenue.

Location Theory.


Who is Losch?• A German Economist. He wrote a book “ The Spatial

Organisation Of Economy” in

1939. • later on it translated in English as “The

Economics Of Location” in 1954.

• He gave theory of profit maximasation.

August Losch.(1906-1945) Model of Industrial Location : Losch.

Maximum Profit Theory. (Losch theory)Assumptions:-

• Isotropic plane or Homogeneous plane.

• Identical preference among the population.

• Evenly distributed population.

• As distance rose so did cost.

• People acted economically rational.


Theory • Location of a company lies where the Net Profit is

greatest.

• Net Profit = Cost of Product – Sales Revenue.

• Entrepreneurs refers a location where difference is greatest.

• This theory is mainly built on sales revenue rather than production and distribution costs.


Graphical Representation.

Zone of profitability.

Cost

Revenue

(Price)

(Space)


A B C

D

Examples.


Nearest example “ Chitale Industries”.

Criticism. It is very difficult to pinpoint single best location.

• labor will be substituted by automated machineries.

• Increasing transport cost can manage by reducing land rent.

• From this substitutional principles , no. of location may appear as optimal location.

Problem arise when whole series of points exist where total sales revenue is equal to cost of production.


Questions ?

The End….

models of industrial location by losch

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